When does an increase in price cause an increase in total revenue
A)when demand is elastic
B)when demand is inelastic
C)when demand is unit elastic
D)when demand is perfectly elastic

Question

Quizplus · Accepted Answer

When demand is inelastic, an increase in price leads to a more significant increase in total revenue because consumers are willing to pay a higher price for the good or service even if its price goes up. Therefore, the percentage change in quantity demanded is relatively lower than the percentage change in price, resulting in an overall increase in total revenue.

When Does an Increase in Price Cause an Increase in Total